2017 is in the books and 2018 is now upon us. A dramatic close to 2017 on Capitol Hill ushered in sweeping changes to the tax code that will begin to impact both employers and employees in a number of ways – some more immediately – from employers losing deductions for sexual harassment settlement payouts, to penalties for high nonprofit executive compensation, to tax deferral on exercise of stock options for public company executives, to employee benefit plans. Wage and leave-related issues are also likely to dominate in 2018, as more states (and employers on their own initiative) increase wage thresholds and broaden employee paid and unpaid leave entitlements (even for some smaller employers). Salary history bans, such as those already enacted in New York City, Massachusetts, and California, will continue to get traction in 2018 as more states and municipalities jump on that bandwagon. We also expect to continue to witness a significant shift in the NLRB’s enforcement policy and decision-making; the NLRB’s new General Counsel has already announced a number of changes that are sure to make employers sigh with relief. Also in 2018, employers could continue to face rising uncertainty with respect to health plans in the wake of the tax bill’s repeal of the individual mandate that was central to keeping health plans affordable under the Affordable Care Act. Finally, so that we can help keep you accountable to the five New Year’s resolutions we made for you over the holidays (that we know you were eager to adopt as your own), we have collected them for you here: (1) review and refresh your non-harassment policies and training; (2) update your leave policies; (3) make sure your job applications comply with new state ban-the-box laws and salary history inquiry bans; (4) assess the strength and enforceability of your post-employment covenants under changing state law; and (5) make sure your employee benefit plans are compliant.
As we count down to the fast-approaching New Year, one of the most significant changes taking place for employers in New York is the implementation of the New York Paid Family Leave law, which takes effect on January 1, 2018. We previously posted a comprehensive guide for employers on the steps they need to take in advance of January 1st to prepare for the implementation of Paid Family Leave, and for those who have not yet tackled this item, it is not too late!
New York Paid Family Leave
New York’s Paid Family Leave law will be phased in over four years, from 2018 to 2022. When fully implemented, the law will allows employees to take up to 12 weeks of job-protected paid family leave to:
- care for a family member (including a child, parent, grandparent, grandchild, spouse or domestic partner) with a serious health condition;
- bond with the employee’s newborn or newly-placed adoptive or foster child during the first 12 months following birth or placement; or
- address any qualifying exigency relating to a spouse, domestic partner, child or parent who is serving on active military duty.
The law is essentially structured as an additional insurance policy that employers will now be required to provide to employees. In many cases, this policy will be a rider to an employer’s existing disability insurance policy. The law is funded through employee contributions made via payroll deductions at the rate of 0.126% of an employee’s wages, up to an annual maximum of $85.56.
For those employers who have not yet focused in on their compliance obligations, and to prepare for implementation as we enter the New Year, we have put together a brief checklist of steps employers should take now to be ready come January 1st:
- Employers should immediately contact their insurance carriers to arrange for Paid Family Leave coverage.
- If you aren’t already deducting PFL contributions, employers should coordinate with their payroll departments and/or payroll vendors to arrange for deductions to be made beginning on January 1.
- Employers must update their written materials including their employee handbook and/or other written guidance to include necessary information about Paid Family Leave and to integrate this new leave entitlement with their other impacted leave policies.
- Employers should post the Notice of Compliance [PFL 120] received from their insurance carrier in a conspicuous place.
- Employers should identify employees who will not be eligible for Paid Family Leave and inform them that they can choose to waive coverage. Distribute and collect waivers from non-eligible employees.
- Post or distribute the Statement of Rights for Paid Family Leave when an employee takes Paid Family Leave or takes time off from work for a Paid Family Leave qualifying event, even if they have not requested Paid Family Leave.
- Train managers to recognize Paid Family Leave requests and to alert Human Resources, and train Human Resources on how to process requests, including distribution and completion of appropriate paperwork and tracking leave.
While this may sound like a lot to do, rest assured that we have been helping employers through all stages of managing and implementing this new policy.
California Expands Protections with New Parent Leave Act
For those employers with employees in California, the New Year brings new developments on the family leave front as well. While California employers with 50 or more employees continue to be covered by the California Family Rights Act and the federal Family and Medical Leave Act, as of January 1, 2018, the newly-enacted New Parent Leave Act will expand those protections to smaller employers. The new law requires California employers with 20 to 49 employees within a 75-mile radius to provide up to 12 weeks of job-protected unpaid parental leave to employees.
The law covers employees with more than 12 months of service with the employer and at least 1,250 hours of service during the previous 12-month period, and permits leave to be taken for a single purpose: “to bond with a new child within one year of the child’s birth, adoption, or foster care placement.” The 12 weeks of leave provided by the New Parent Leave Act is in addition to the up to 4 months of pregnancy disability leave (PDL) available to employees working for an employer covered by the California PDL law, i.e. employers with five or more employees. You can find more information on the New Parent Leave Act in our previous post.
Introducing … Protected Weekends
Need a vacation after implementing all these changes to the family leave laws? Well, a few employers have tossed around the idea of a protected weekend. While novel, some companies are beginning to require that employees take vacation and at least some time off on the weekends. Both Citigroup and JP Morgan have recently implemented a “Protected Weekend” day on which employees may not come into the office or log on remotely to work – however, they can monitor their emails in case any critical issues arise. We will keep watching for developments in this area as companies that have adopted these policies begin to accumulate data regarding their effectiveness.
Last month, the EEOC filed a lawsuit against Estee Lauder in a Pennsylvania federal court alleging that Estee Lauder’s parental leave policy discriminates against employees on the basis of gender by providing unequal benefits to biological mothers and fathers. What’s notable about this lawsuit is that it involves a policy which, on its face, uses a “primary” and “secondary” caregiver distinction that provides different amounts of leave to employees based on that distinction without regard to their gender – a practice used by many employers in their parental leave policies. This lawsuit has left many employers wondering whether such a policy is at risk of being unlawful. We do not think it is at this time.
What is happening in employment law? We will be providing you with quick employment law updates on a bi-monthly basis in a new series called “The Bubbler.” It will let you know what’s what and who’s who in the continually-evolving, ever-important, hard-to-keep-track-of employment law world. The Bubbler delivers current events and other important news to our readers without the time or the interest to piece through the recent legislation, the ever-growing release of regulations and other agency guidance and the lengthy court decisions. We’re your colleagues at the water cooler who tell you just enough to pique your interest (but then provide links to satisfy your curiosity). Enjoy!
Regulations implementing the Paid Family Leave Act became effective on Wednesday, July 19, 2017. No substantive changes were made to the proposed regulations that were published back in May 2017 (which we addressed here).
The Paid Family Leave Act will provide, when fully implemented, employees in the state of New York with up to 12 weeks of job-protected paid family leave to (1) care for a family member (including a child, parent, grandparent, grandchild, spouse or domestic partner) with a serious health condition; (2) bond with the employee’s newborn or newly-placed adoptive or foster child during the first 12 months following birth or placement; or (3) address any qualifying exigency relating to a spouse, domestic partner, child or parent who is serving on active military duty. The Act will be funded by employee contributions and, when fully implemented, the employee will be entitled to income replacement of up to 2/3rds of the state average weekly salary.
January 1, 2018 was established as the date upon which benefit payments begin but the Act allowed employers to begin taking deductions as of July 1, 2017 to offset the cost of acquiring the mandated insurance policies.
The New York State Workers’ Compensation Board recently revised its proposed regulations (described in our previous blog post here) to the law. The revisions were in response to over 100 written comments. Here is a quick summary of those revisions:
The New York State Workers’ Compensation Board is out with proposed regulations providing guidance to employers, insurance carriers and employees regarding their rights and responsibilities under New York’s new Paid Family Leave law, which is scheduled to go into effect January 1, 2018. Comments on the proposed rules will be accepted for 45 days – until April 8th (although we note that’s a Saturday). For our earlier post on the enactment of the Paid Family Leave Act, see here.
Over the next two weeks we will release our Year in Review segment, which will look at the key labor & employment law developments from 2016 in New York, the DC Metro Area, Massachusetts, and California while offering our thoughts about 2017. Today we kick off this segment with New York. In addition, please join us in NYC on April 6, 2017 for Mintz Levin’s Third Annual Employment Law Summit as we address some of the key labor & employment issues impacting employers in 2017. Register here.
2016 brought big changes for New York State and City employers, including expansive new discrimination protections and substantial increases in the minimum wage and exempt salary thresholds. While New York employers who successfully navigated 2016’s rush of legislative, regulatory and judicial obstacles might feel they’ve earned the right to shift their focus back from compliance issues to running their businesses, they should not lose sight of the additional challenges expected in 2017.
I recently read in the NY Times that the Equal Employment Opportunity Commission settled a charge with Time Warner, Inc., the parent company of CNN and Turner Broadcasting System, Inc. where a former employee alleged that Time Warner’s parental leave policy discriminated against him as a biological father. I encourage employers to read the article, as it reemphasizes the shifting attitudes in this country on family-friendly leave policies, and from a legal perspective, it serves as yet another reminder that employers should review their parental leave policies to make sure they are up to date and do not discriminate against fathers.